Ten Network Holdings (TEN)

Credit Suisse has upgraded
Ten Network Holdings
to “outperform" from “neutral" and retained a target price of $0.33 following TEN’s capital raising and removal of financial risk overhanging the stock.

“TEN has announced a $230 million fully underwritten 4-for-5 accelerated nonrenounceable entitlement offer at $0.20 per share (38.5 per cent discount to TEN’s closing price on December 4, 2012, and 25.8 per cent discount to TERP of $0.27)," Credit Suisse said, after which, “TEN will move to a $45 million net cash position post raising. These funds will be used to restructure the business – specifically to improve content agreements, programming, marketing and agency deals."

Operational risks appear to be priced in and “we do not expect TEN’s commercial revenue share (currently 21 per cent versus 25 per cent last year) to materially deteriorate further from this point".

“While a recovery to 25 per cent appears unlikely in the short term given TEN’s relatively weak position in sport content and increased competition from rival networks in reality television, risks appear slightly skewed to the upside over the medium term," Credit Suisse said.